In June the state of Florida made an unusual announcement: it would sue the U.S. Army Corps of Engineers over the corps’s plan to reduce water flow from reservoirs in Georgia into the Apalachicola River, which runs through Florida from the Georgia-Alabama border. Florida was concerned that the restricted flow would threaten certain endangered species. Alabama also objected, worried about another species: nuclear power plants, which use enormous quantities of water, usually drawn from rivers and lakes, to cool their big reactors. The reduced flow raised the specter that the Farley Nuclear Plant near Dothan, Ala., would need to shut down.

Georgia wanted to keep its water for good reason: a year earlier various rivers dropped so low that the drought-stricken state was within a few weeks of shutting down its own nuclear plants. Conditions had become so dire that by this past January one of the state’s legislators suggested that Georgia move its upper border a mile farther north to annex freshwater resources in Tennessee, pointing to an allegedly faulty border survey from 1818. Throughout 2008 Georgia, Alabama and Florida have continued to battle; the corps, which is tasked by Congress to manage water resources, has been caught in the middle. Drought is only one cause. A rapidly growing population, especially in Atlanta, as well as overdevelopment and a notorious lack of water planning, is running the region’s rivers dry.

Water and energy are the two most fundamental ingredients of modern civilization. Without water, people die. Without energy, we cannot grow food, run computers, or power homes, schools or offices. As the world’s population grows in number and affluence, the demands for both resources are increasing faster than ever.

Woefully underappreciated, however, is the reality that each of these precious commodities might soon cripple our use of the other. We consume massive quantities of water to generate energy, and we consume massive quantities of energy to deliver clean water. Many people are concerned about the perils of peak oil—running out of cheap oil. A few are voicing concerns about peak water. But almost no one is addressing the tension between the two: water restrictions are hampering solutions for generating more energy, and energy problems, particularly rising prices, are curtailing efforts to supply more clean water.

The paradox is raising its ugly head in many of our own backyards. In January, Lake Norman near Charlotte, N.C., dropped to 93.7 feet, less than a foot above the minimum allowed level for Duke Energy’s McGuire Nuclear Station. Outside Las Vegas, Lake Mead, fed by the Colorado River, is now routinely 100 feet lower than historic levels. If it dropped another 50 feet, the city would have to ration water use, and the huge hydroelectric turbines inside Hoover Dam on the lake would provide little or no power, potentially putting the booming desert metropolis in the dark.

Research scientist Gregory J. McCabe of the U.S. Geological Survey reiterated the message to Congress in June. He noted that an increase in average temperature of even 1.5 degrees Fahrenheit across the Southwest as the result of climate change could compromise the Colorado River’s ability to meet the water demands of Nevada and six other states, as well as that of the Hoover Dam. Earlier this year scientists at the Scripps Institution of Oceanography in La Jolla, Calif., declared that Lake Mead could become dry by 2021 if the climate changes as expected and future water use is not curtailed.

Conversely, San Diego, which desperately needs more drinking water, now wants to build a desalination plant up the coast, but local activists are fighting the facility because it would consume so much energy and the power supply is thin. The mayor of London denied a proposed desalination plant in 2006 for the same reason, only to have his successor later rescind that denial. Cities in Uruguay must choose whether they want the water in their reservoirs to be used for drinking or for electricity. Saudi Arabia is wrestling with whether to sell all its oil and gas at rec­ord prices or to hold more of those resources to generate what it doesn’t have: freshwater for its people and its cities.